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Friday, September 6, 2013

3 Things I Think I Think

1) In his monthly letter, Bill Gross says baseball is boring, but fails to actually make any credible reasons why other than there’s not enough action. He says:

“First of all, baseball is the most boring game in the world next to cricket. I don’t know how to play cricket, which is the only reason I rank it second. CNN Sports did an actual survey of how much time during an average two hour and 39 minute game that baseball players are actually moving – you know, swinging a bat or running to first base. Five minutes and 13 seconds!”

First of all, if you don’t know how to play something then how can you even begin to understand whether it’s boring or not? I personally don’t know much about cricket so I’ll let my foreign friends here defend a game that millions of people love, but I’d only say that you shouldn’t hate what you don’t even know. That’s just silly. But let’s get real here. Baseball is a thinking man’s game. If baseball is boring then chess is an abomination! And if action equates to excitement then the marathon is the most exciting thing in sports! Of course, chess isn’t boring and marathons aren’t exciting. But the reason why real baseball lovers love baseball is because it’s a strategic man’s game. It looks awfully boring at first glance, but there’s quite a bit of action going on at all times. All that “scratching” is part of a secret conversation going on between two sides who are trying to win the game. Maybe Bill Gross never played competitive baseball. I did. And I appreciate the game because of the strategy involved. With a runner on second base and a left handed batter up and 0 outs you have to protect against the potential for a right side ground ball or a hit and run that will advance the runner to single base scoring position. Do you pitch him inside knowing he might be able to pull the ball to where he can sacrifice himself to move the runner? What if he hits the inside ball well? What if he hits the fast ball well? What do you do with a 1-2 count? Do you throw around the batter? What if the next batter is a poor batter? Do you intentionally walk the runner? Where do you position the defense to optimally counter the offense’s strategy? WHAT IS THE OFFENSE’S STRATEGY? What if you have guessed their game plan wrong? The strategy in a baseball game, in every pitch is hundreds of moves deep in the exact same way a chess game is. You might not appreciate it, but odds are, if you don’t it’s because you don’t understand it….

Basically, Scott (we’re on a first name basis now after our brief run-ins with one another) says the Fed has failed, but only because they haven’t done enough. He says they should set an NGDP target. I say, what will help them hit the target. He says they just have to set the target and that’s enough. I say what’s the transmission mechanism. He says the Chuck Norris effect. I say Bruce Lee beat Chuck Norris. And round and round we go. So, what should Ben Bernanke tell his mother? Ben should thank his mother and father (the US Congress) for having run enormous budget deficits these last 5 years and giving the appearance that this chart was all due to QE. Could Ben do more? Probably. But it will require a real transmission mechanism to be effective and no, saying is not enough, you must do….

3) I came across this quote that got my wheels turning:

“Happiness is not something you postpone for the future; it is something you design for the present.”

Isn’t it interesting how so much of our monetary lives revolve around deferring happiness? We plan to follow a green line into the future that leads us to a magic number where we buy an island and retire to a life of pina coladas or something like that. But is that what it’s really all about? Isn’t it more about finding the right balance so you can enjoy the life you have TODAY rather than some life you might have TOMORROW? Isn’t there a better way to balance all of this so that we’re not simply always building a goal around a future that might never materialize or one that, if it does materialize, isn’t nearly as glamorous as we think? Chew on that deep thought as you head into the weekend and let me know what you think….